Shares in cybersecurity firm CrowdStrike have plunged more than 12% as investors shun the company responsible for causing a global IT outage.
Many businesses are still recovering after a faulty “content update” last week crashed 8.5 million Microsoft Windows computers around the world.
The issue has required manual reboots in some cases.
Delta Airlines, one of the most affected firms, has cancelled more than 5,000 flights since Friday, including more than 700 on Monday, according to outside tracking firm, Flight Aware.
Other entities, such as the UK’s National Health Service, have said their systems were operating more normally.
The hit to CrowdStrike shares on Monday followed an 11% drop on Friday, reflecting the severity of the incident for the firm, which had been one of the most trusted names in cybersecurity.
A CrowdStrike executive apologised again for the problem on Monday.
Shawn Henry, the company’s chief security officer, said the firm had “let down the very people we committed to protect”.
“The confidence we built in drips over the years was lost in buckets within hours, and it was a gut punch,” he said in a LinkedIn post on Monday.
“But this pales in comparison to the pain we’ve caused our customers and our partners. We let down the very people we committed to protect, and to say we’re devastated is a huge understatement.“
The former FBI executive assistant director said the weekend had been “the most challenging 48 hours” of his 12 years at the company, promising it would use the incident as an opportunity to “emerge better and stronger than ever”.
CrowdStrike was founded in 2011.
It boasts some 29,000 customers around the world, including government agencies in the US and UK and some of the world’s biggest companies.
Shares in the firm were up nearly 40% this year before the incident hit. It said on Sunday that “a significant number” of devices that were impacted by a global IT outage on Friday were back online.
Some investors are betting that the firm’s rivals will benefit from its current struggles, which have exposed the world’s dependence on one big player, drawing attention from anti-monopoly regulators.
Sentinel One, for example, saw shares surge more than 8% on Monday.
But analysts said despite the current hit to CrowdStrike’s shares, they did not foresee long-term damage to the business.
“The reality is despite CrowdStrike’s epic failure last week, there are few alternatives to CrowdStrike and the switching costs are high,” Gene Munster, managing partner at Deepwater Asset Management, which is known for its tech investments, wrote on social media.
“In other words, when the company reports its July quarter late in August, I expect the commentary to suggest unknowns about near-term customer retention. That said, I expect there will be few customer defections long-term.”
Speaking to the House of Commons on Monday, Cabinet Office Minister Ellie Reeves said that the majority of sectors affected by the CrowdStrike bug had mostly recovered, including aviation, railroads, and maritime systems.
But she warned that some “minor disruption” would continue, including at the NHS.
She added that the government would work with the National Cyber Security Centre and other partners “to review the lessons learned”.
The incident showed how dependent the modern world is on “complex and interconnected IT systems and how essential preparedness for such events is”, the minister told MPs.
Wedbush Securities analyst Dan Ives said it would be critical for CrowdStrike to resolve its issues this week.
“This will take some time to settle down but does not change our positive long term view of CrowdStrike or the cyber security sector,” he wrote in a note on Monday.
“CrowdStrike remains the gold standard and we believe this historical incident will only be a dark chapter for the company and not impact the long term bull story for the name.”
Reporting contributed by Chris Vallance
Source Agencies
